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Tuesday, December 07, 2010

A great idea

The new government in Slovakia has come up with a great idea to avoid budget deficits.

As AFPreports:"The more public money Slovak lawmakers spend, the less they will earn as of next year, under draft legislation adopted by the government on Wednesday binding MPs' salaries to the public deficit".

If the law is passed by parliament, they will earn 15.6% less in 2011, representing twice the size of the 2010 public deficit, projected to reach 7.8% of GDP.

Similarly, if next year's deficit drops to 4.9% of GDP as projected, MPs' pay will be cut by 9.8% in 2012.

"Lawmakers are responsible for passing the state budget in parliament, therefore responsible for the deficit level."

Ain't that the truth. Perhaps this is something for Westminster to consider?

With a bit of a twist, this also seems like a brilliant idea to implement at the EU level. MEPs, as you know, still live in a different solar system when it comes to spending public money, the one thing they really know how to do. The initial demand from both the European Commission and the European Parliament to increase the EU budget by 6.2% at a time of Europe-wide austerity speaks for itself.

If tweaking the Slovak proposal slightly to include increases to overall spending, a 6.2% rise of the EU budget would mean a 12.4% cut in MEPs' salaries.

Under such an arrangement, we wonder if MEPs would still be "offended" if somebody tried to prevent the EU budget from growing?